Posted
by
samzenpus
on Thursday August 27, 2009 @06:57AM
from the easy-financing dept.

adeelarshad82 writes "The world's top mobile phone maker, Nokia, said it would launch a mobile financial service next year targeting consumers, mainly in emerging markets, with a phone but no banking account. Nokia's Money service was based on the mobile payment platform of Obopay, a privately-owned firm that Nokia invested in earlier this year, and it is now building up a network of agents. Obopay, which uses text messaging and mobile Internet access, charges users a fee to send money or to top up their accounts."

Oh you mean in a similar way that O2 (a UK mobile company) started doing in the UK recently with their Cash Manager card?

O2 Cash Manager [o2.co.uk] - "You load money onto the card, (using your phone or other methods) then whenever you use it you'll receive a free real time text alert. This will tell how much money you've loaded, spent or withdrawn, and how much you've got left. Simple."

It's been going on in Africa for quite a while. It sounds like they are just investing more in owning the full process so they can make more profit from what is already going on and will surely be growing. The cell phone companies in much of Africa have essentially become the banks for many people, and of course the vast majority of phones you will find there are Nokia phones.

I was in a meeting last friday with a guy from a communications lab at the University of Central Florida. He is working on distance learning with smart phones. I think we may be doing a test study with them in Kenya next year. We were primarily focused on the education software part of it, but much of the discussion also dealt with microloans and transferring of funds via this method. We would like what we do to be self sustaining. It's really some very exciting stuff I think, but I may be a bit biased.

Not directly related to the article - but they are using Android as their primary platform. I'm stoked about that too because I think Android is going to be huge down the road.

I can see this working in a modernized market like the UK (see, "those with accounts"), but how does this help those in emerging countries with no bank accounts? Credit cards? Don't you need an account for a legitimate credit card? It's been so long since I've had mine, I can't remember.
Seriously, I'm not "getting" how they plan on converting analog currency into a digital transaction with the phone and nothing else.

A person has a phone - they pay for minutes on the sim card. Those minutes have some value. That value can be transferred to another phone. People move money around and the phone company is essentially their bank. There are also endpoints where cash can be had, but in many places this isn't necessary as the money just moves around between phones.

Here in Thailand, a similar system works by phone users purchasing top-up cards at 7-11's, supermarkets or general stores. Once you've got the credit on your phone, you can make a payment by sending a specially formatted text message. The stores selling top-up cards are everywhere, and no credit cards or bank accounts are needed.

This appears to be nothing like the Nokia service from TFA. All this is is a pre-pay credit card (of which there have been many available in the UK for a while now [what-prepaid-card.co.uk]), which is only available to O2 customers and has the added function that they send you a text message when your balance changes. It does not let you pay for your stuff with your mobile, and it does not let you top it up using your mobile phone (although you can top it up at O2 shops and mobile phone 'Pay Points').

Last time we were trying to push USSD based 'small payment system' in GSM networks, the Central Bank (of that country) launched an independent study which found that security practices in GSM networks were below standards to permit financial transactions. Cloning and some weaknesses in A3, A5 and A8 (and other algorithms/mechanisms) played major concerns.

TFA does not mention anything about security, but, I was wondering how exactly they would take care of this.

If proper certificates preinstalled on the phone and bank server by phone manufacturer, public key crypto shouldn't be vulnerable to man in the middle, and insecurity of GSM wouldn't matter. Nokia is exactly in position to do it.

If proper certificates preinstalled on the phone and bank server by phone manufacturer, public key crypto shouldn't be vulnerable to man in the middle, and insecurity of GSM wouldn't matter. Nokia is exactly in position to do it.

What bank?

There's no need for a bank at all. Transactions can be done purely using phone credit because, like cash, it retains its value. 5 bucks worth of credit is still worth 5 bucks after you've transferred it. Most mobile network carriers in the developing world have this capability already. It's extremely popular, especially in areas where crime is a problem. Lose your phone? It's a problem, but you can still call the phone company and cancel your account before anyone spends the credit you had stored

GSM only authenticates one way, not both, so it is almost ideal setup for man in the middle attacks. One of the presentations at last year's CCC, the
25C3 [events.ccc.de] covered this, but you can find plenty of older and newer material on it elsewhere.

Any GSM phone-based payment system has some big challenges. GPRS could be better, since you can then run something behind SSL or SSH. However, even then, when it comes to money, the designers must design the system on the assumption that the network is insecure, perhaps

Where is the need for a mobile phone? Why can't this be done with just a credit card and an RFID chip instead like the Barclaycard OnePulse [barclaycar...ulse.co.uk]. Investing in infrastructure for this kind of card would make a hell of a lot of more sense to me.

Need? Who said anything about need? Look at the title again - "Nokia is launching..."

This is being launched on a phone because it's being launched by a company that makes phones.

Sure, this could all be done with a credit card and an RFID chip, but then Nokia wouldn't be launching it, would they?:)

Nokia wants your phone to be your phone, your Internet connection and email client, your camera, and now your wallet. The more functions they can put on a phone and have them generally accepted, the more people

People already have and use cellphones. Go to Peru and you'll find people riding donkeys and talking on cellphones. Expecting people to carry an additional piece of plastic is stupid. We wouldn't even have land lines any more (hardly) in this country if it were smaller, because most of us have cellphones too, but we have hills and trees and therefore problems covering large areas.

It's simple, they use a phone as people already have a phone, there is no need for new infrastructure, and because people using the system don't have a bank account (let alone a credit card).This is not even a brand new idea by Nokia. Lots of operators are doing similar things.

Where is the need for a mobile phone? Why can't this be done with just a credit card and an RFID chip instead like the Barclaycard OnePulse [barclaycar...ulse.co.uk]. Investing in infrastructure for this kind of card would make a hell of a lot of more sense to me.

Credit cards aren't necessities; cellphones are beginning to be, as they link rural merchants with their market and the rest of the world. Developing countries also prefer cell towers over phone lines for cost issues. They're basically skipping over a century of prototyping. With that said, hitchhiking one extra function onto a guaranteed platform would seem logical enough.

That'd require an additional item that is useless except for its cash value. Cell minutes have use by themselves. In countries where only a few people in an area have cells, this allows them to offer communications services and act as ATMs.

They sell use of the cell for cash, but you can also buy them minutes to send to another "cell operator", who will then pay out in another village from their stash from selling use of their cell. Tadah, low-resource wire transfer.

If any of you have lived in countries that are less developed, you will notice that most people will have a cell phone, but not a bank account, credit card or anything other than cash. The good news about these types of services is that they are begining to provide the majority of the world with the opportunity to have money "on account" and can actually be used more and more like a credit card. If you need something or want to buy something from someone, you can transfer money from your account to someon

I thought it was already quite common to pay for things via a mobile phone in Europe and Asia. The transactions and billing show up on the phone statement. My company has a client who was interested in this sort of thing for their service and instead had to go with a clumsy workaround. Apparently credit card companies and banks have lobbied quite hard to keep anyone else from encroaching on their business.

So I'm curious to see if Nokia's service will ever see the light of day in the US. American financial i

I suppose the trend is unstoppable by now as we all jumped right into it with our credit and debit cards. Still, I'm always amazed that people willingly pay to pay, that is, give a fraction of the transaction to some third party, just for allowing the transaction to take place. In the good old days of cash, the passing of money from one hand to another was free. Now it appears that every time I need to pay for something, I need to pay a little more. Is that really acceptable? Am I the only one who's not too

I suppose the trend is unstoppable by now as we all jumped right into it with our credit and debit cards. Still, I'm always amazed that people willingly pay to pay, that is, give a fraction of the transaction to some third party, just for allowing the transaction to take place. In the good old days of cash, the passing of money from one hand to another was free. Now it appears that every time I need to pay for something, I need to pay a little more. Is that really acceptable? Am I the only one who's not too

I've been doing pay as you go for the past 8 months with Virgin Mobile which uses the Sprint network. It's been convenient to top up since I get the topup cards at Wal Mart while I'm shopping for my weekly goods. I buy a $20/200 minute card and could get better/minute rates if I did a minute pack and paid more for each topup. All in all it's a good setup, although there are a couple of times where my remaining minutes were exhausted before I could topup and had to go get a card to call back, which was m

I believed this service is far more successful in third world country. In some place there's no paypal or eventhe concept of wire transfer is quite alien to them. it's easier to send money through sms than going to thebank and depositing money to someone's account.